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Medicaid coverage in your state

A state-by-state guide to Medicaid eligibility, enrollment, and benefits

  • By
  • healthinsurance.org contributor
  • September 3, 2016

When the ACA was enacted nearly six years ago, Medicaid expansion was a cornerstone of lawmakers’ efforts to expand realistic access to healthcare to as many people as possible. The idea was that everyone with household incomes up to 133 percent of poverty (138 percent with the 5 percent income disregard) would be able to enroll in Medicaid.

People above that threshold but whose incomes didn’t exceed 400 percent of poverty would be eligible for premium tax credits in the exchanges to make their coverage affordable. And although there are some exceptions, most people in the individual health insurance market with incomes above 400 percent of poverty are able to afford insurance even though they don’t qualify for subsidies.

(Regardless of income, people who get their insurance from an employer receive subsidies in the form of the employer’s contribution to their premiums – and their premiums are pre-tax).

Because Medicaid expansion was expected to be a given in every state, the law was written so that premium subsidies in the exchange are not available to people with incomes below the poverty level. They were supposed to have access to Medicaid instead.

20 states say ‘No’ to Medicaid expansion

Unfortunately for millions of uninsured Americans, in 2012 the Supreme Court ruled that states could not be penalized for opting out of Medicaid expansion. And 20 states have not yet expanded their programs. (for most of 2015, there were still 22 states that had not expanded Medicaid, but Montana began enrolling people in their newly-expanded Medicaid program in November 2015, for coverage effective January 2016, and Alaska‘s Medicaid expansion took effect in September 2015).

As a result, the Kaiser Family Foundation estimates there are 3,087,000 people in the coverage gap across 19 of those states. (Although Wisconsin has not expanded Medicaid under the ACA, BadgerCare Medicaid is available for residents with incomes up to the poverty level, so there is no coverage gap in Wisconsin.)

Being in the coverage gap means you have no realistic access to health insurance. These are people with incomes below the poverty level, so they are not eligible for subsidies in the exchange. But they are also not eligible for their state’s Medicaid program.

In many of the states that have not expanded Medicaid, low-income adults without dependent children are ineligible for Medicaid, regardless of how little they earn. For those who do have dependent children, the income limit for eligibility can be very low: In Alabama, parents with dependent children are only eligible for Medicaid if their income doesn’t exceed 13 percent of poverty level. For a family of three, that’s only $2,611 in annual income.

Although the 3 million people in the coverage gap can qualify for an exemption from the shared responsibility penalty – and are thus not subject to the ACA’s penalty for not maintaining health insurance – that’s likely to be little consolation to those who want and need health insurance but are unable to obtain it because their state has rejected Medicaid expansion.

More states easing into expansion

But New Hampshire, Indiana, Pennsylvania, Alaska, and Montana all expanded their Medicaid programs since mid-2014. And it’s likely more states will join them in the coming years. The first six states to implement Medicaid did so in 1966, although several states waited a full four years to do so. And Alaska and Arizona didn’t enact Medicaid until 1972 and 1982, respectively. Eventually, Medicaid was available in every state, but it certainly didn’t happen everywhere in the first year.

Utah lawmakers continue to discuss the issue of Medicaid expansion. In Louisiana, the Governor-elect has said that expanding Medicaid as soon as possible in 2016 is one of his top priorities.

There’s big money involved in the Medicaid expansion decision for states. The federal government will pay the vast majority of the cost of covering people who are newly eligible for Medicaid. Through the end of 2016, the federal government fully funds Medicaid expansion. The states start to pay a small fraction of the cost starting in 2017, eventually paying 10 percent in 2020. From there, the 90/10 split is permanent; the federal government will always pay 90 percent of the cost of covering the newly eligible population.

The cost of NOT expanding Medicaid eligibility

Because the federal government funds nearly all of the cost of Medicaid expansion, the 20 states that haven’t yet expanded coverage will miss out on nearly $364 billion in federal funding between 2013 and 2022, if they continue to reject Medicaid expansion. (Indiana, Pennsylvania, Alaska, and Montana have expanded their Medicaid programs since that report was produced in 2014, so they are no longer missing out on federal Medicaid expansion funding.)

Just five states – Florida, Texas, North Carolina, Georgia, and Tennessee – stand to receive nearly 60 percent of that funding (a total of $227.5 billion by 2022) if they expand Medicaid to cover their poorest residents.

For residents of states that haven’t expanded Medicaid, their federal tax dollars are being used to pay for Medicaid expansion in other states, while none of the Medicaid expansion funds are coming back to their own states. From 2013 to 2022, $152 billion in federal taxes will be collected from residents in states not expanding Medicaid, and will be used to fund Medicaid expansion in other states.

Hospitals in states that don’t expand Medicaid are suffering too. Hospitals that treat large numbers of uninsured patients rely on federal funding from Disproportionate Share Hospital (DSH) payments to help cover the cost of the uncompensated care they provide. But DSH payments are being phased out by 2020, because Medicaid expansion was expected to sharply reduce the amount of uncompensated care hospitals must provide. Hospitals in states that have rejected Medicaid expansion will continue to provide a significant amount of uncompensated care, but their funding will be stretched even thinner than it already is.

The human toll of the Medicaid coverage gap

Of course there’s more to Medicaid expansion than just money. Harold Pollack very clearly explains the human toll of the Medicaid coverage gap: Based on the 3,846,000 people who were expected to be in the coverage gap in January 2015, we can expect 4,633 of them to die in any given year because they don’t have health insurance. (Pollack’s number is higher, because his article was written in May 2014, before New Hampshire and Pennsylvania agreed to expand coverage; Indiana and Alaska have also expanded coverage in 2015, and Montana‘s enrollment in Medicaid expansion began in November 2015, for coverage effective January 2016).

There’s a slow but steady push towards Medicaid expansion based on those financial and moral arguments, even in some of the reddest states, and despite the fact that the 2014 elections tilted in favor of the GOP. And the Supreme Court’s June 2015 ruling in King v. Burwell – which upheld the legality of premium subsidies in states that use the federally run health insurance exchange (Healthcare.gov) – has given new life to Medicaid expansion discussions in states that want to utilize Medicaid funds to purchase private health insurance for low-income residents. (If the Court had struck down subsidies in states that haven’t created their own exchanges, the private insurance market would likely have destabilized and premiums would have skyrocketed.) Eventually, most of the states will probably accept federal funding to expand Medicaid, although it could still be several years out in some states.

Public support for Medicaid expansion

Public support for Medicaid expansion is relatively strong, even in Conservative-leaning states: In Wyoming (considered the most Conservative state), 56 percent of the public are in favor of Medicaid expansion. (In February, the state legislature rejected Republican Governor Matt Mead’s plan to expand Medicaid, so 14,000 people in Wyoming are still in the coverage gap; Mead renewed his push for Medicaid expansion in the fall of 2015.)

In Utah, 88 percent of the state’s residents supported Governor Herbert’s 2014 proposal for Medicaid expansion over the status quo. But lawmakers in the state have continually rejected Medicaid expansion – most recently in October 2015 – and the coverage gap persists in Utah.

In Texas – home to nearly a quarter of those in the coverage gap nationwide – a board of 15 medical professionals appointed by Governor Rick Perry recommended in November 2014 that the state accept federal funding to expand Medicaid, noting that the current uninsured rate in Texas is “unacceptable.” (Twenty-four percent of Texas residents are uninsured – the highest rate in the country.) But no real progress towards Medicaid expansion has been made since then.

There are several other states where the legislature or the governor – or both – are generally opposed to the ACA, but where Medicaid expansion is actively being considered, either by the governor or legislature or in negotiations with the federal government. These include North Carolina, Tennessee, Virginia and Missouri.

Medicaid expansion was a heavily debated topic during the 2015 legislative session in many states, and that’s likely to continue in 2016. Our Medicaid section provides updated state-by-state information on the current status of Medicaid expansion, along with general information about each state’s program. If you’re curious about what’s going on in your state, check it out.

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